Tuesday, September 19, 2017

Military Defeat as a Financial Collapse Trigger

Back in 2007 I wrote Reinventing Collapse, in which I compared the collapse of the USSR to the forthcoming collapse of the USA. I wrote the following:

“Let us imagine that collapsing a modern military-industrial superpower is like making soup: chop up some ingredients, apply heat and stir. The ingredients I like to put in my superpower collapse soup are: a severe and chronic shortfall in the production of crude oil (that magic addictive elixir of industrial economies), a severe and worsening foreign trade deficit, a runaway military budget and ballooning foreign debt. The heat and agitation can be provided most efficaciously by a humiliating military defeat and widespread fear of looming catastrophe.” (p. 2)

A decade later these ingredients are all in place, with a few minor quibbles. The shortfall of oil is in the case of the US not the shortfall of physical oil but of money: against the backdrop of terminal decline of conventional oil in the US, the only meaningful supply increase has come from fracking, but it has been financially ruinous. Nobody has made any money from selling fracked oil: it is too expensive.

Meanwhile, the trade deficit has been setting new records, defense spending has continued its upward creep and the levels of debt are at this point nothing short of stratospheric but continuing to rise. Fear of catastrophe is supplied by hurricanes that have just put significant parts of Texas and Florida under water, unprecedented forest fires in the West, ominous rumblings from the Yellowstone supervolcano and the understanding that an entire foamy mess of financial bubbles could pop at any time. The one ingredient we are missing is a humiliating military defeat.
Military defeats come in many shapes and sizes, and having the enemy slaughter all of your troops is just one of them. Equally palpable is the defeat of being unable to prevail against a weaker and smaller opponent. Accidentally inflicting damage on one’s own forces can also be quite humiliating. And the ultimate coup de grâce for a military empire is to be unable to join the opponent in battle at all.

We now have samples of all of these. We have fast US navy ships, equipped with all of the most modern radar and navigation equipment, inexplicably colliding with large, slow-moving cargo ships, resulting in the death of sailors. We have the example of Syria, where several years of concerted effort to dismember the country and dislodge its president have resulted in one disaster after another. And now we have the example of North Korea, which tests ballistic missiles and nuclear weapons to everyone’s great consternation while the US holds meaningless military exercises—meaningless because it has absolutely no military cards to play that wouldn’t result in the complete annihilation of the very same ally the US has sworn to protect.

The North Korean impasse is likely to drag on for some time, but the Syrian defeat is already very close to complete, so let us look at it in detail, because it provides a very interesting view into what makes the US, at this point, so much less than a military superpower. (Research credit for this goes to Yevgeny Krutikov in particular, and to others too numerous to mention here.) The Syrian defeat is not the result of a single operation, but an entire sequence of them, each resulting in what can only described as an epic fail. The entire US Syrian campaign can be described as a relentless pursuit of failure. It illustrates many of the features that make the US military machine worse than useless. Once upon a time the purpose of American military spending was to justify American military spending; now it can’t even do that. Key elements of this failure are:

• The complete inability to hold accountable those who are responsible for failure, be they politicians or military officers.
• The complete inability to learn from mistakes and adjust strategies, doing things that have been proven not to work over and over again.
• The complete inability to accept the truth of the situation, instead preferring to inhabit a fictional realm full of moderate terrorists, friendly tribal leaders, rainbows and unicorns.
• The complete inability to resist corruption of every sort, including fraudulent schemes that include outright theft of government property.

The entire US military involvement started back in the summer of 2014. At the time, there was some sort of armed compound near Raqqa, swarming with bearded jihadists that may or may not have been associated with ISIS. They held quite a lot of hostages that included Syrian soldiers as well as American and British citizens who had somehow ended up in Syria. After a lengthy analysis, the CIA decided that the compound should be attacked and occupied and the hostages released.

In early June, a few dozen special forces troops were dropped off in the vicinity of the encampment. After a three-hour battle (this already signals a failure; operations to free hostages should last minutes, not hours) the American troops killed five of the terrorists and took control of a perfectly empty building standing alone in the middle of the desert. There were no hostages, no high-ranking enemy types—nothing useful there. Later it turned out that the hostages were transported out a day before the start of the operation, giving rise to all sorts of questions within the CIA concerning possible leaks.

A few days later “Jihadi John” and his group of three British Arabs calling themselves “the Beatles” and acting under the pseudonyms John, Paul and Ringo beheaded a bunch of people on camera. Among them were the photographer James Foley, the journalist Steven Sotloff, humanitarian mission worker David Heins, British taxi driver Alan Henning (who worked for the same humanitarian mission as Heins) and, last but not least, Peter Kassig, a former member of the US military but at the time also working for some humanitarian mission with bases in Beirut and in Turkey, but regularly finding himself inside Syria—illegally and for unknown purposes.

Specifically, it was Kassig’s death that elicited a curiously strong reaction from Barak Obama, who declared that Kassig “was taken from us in an act of pure evil by a terrorist group that the world rightly associates with inhumanity.” This outburst was widely taken to mean that Kassig worked for either the CIA or US military intelligence. Notably, he was the only one who, while in captivity, converted to Islam and took an Islamic name.

Later, other strange facts began to surface. In particular, it became known that “Jihadi John” had negotiated with the US government and with the family of James Foley, demanding either a 100 or, for whatever strange reason, specifically 132 million dollars as ransom. The last communication from him was a week before the unsuccessful operation by US special forces, but the Americans refused to pay. Pentagon’s official representative Rear Admiral James Kirby blamed it all on the CIA. Most notably, those responsible for this amazing cock-up didn’t shoot themselves in the head like they should have as a question of honor but blissfully carried on with their illustrious careers.

To be sure, there were soon other, even more epic failures to behold. The US started up surveillance flights over Syrian territory, carefully mapping out the desert using first drones, then regular aviation, still not having the foggiest notion of what they were looking at. But apparently they saw pictures of things that looked like they would make nice targets, because in the fall of the same year Obama announced his intention to start bombing ISIS in Syria.

He also announced the start of a program to “train and equip” Free Syrian Army with the goal of overthrowing Bashar Assad. The CIA picked out promising groups, gave them weapons, and then watched as they joined either ISIS or Jabhat an-Nusra en masse. As this went on, US officials continued to refer to these eager new terrorists as “moderate opposition.” Eventually, the US-cultivated myth called the Free Syrian Army fell apart altogether, to everyone’s great embarrassment. But once again the embarrassment was insufficient to cause those responsible to do the honorable thing and shoot themselves in the head.

Done with fiasco number two—onward to fiasco number three. Once the fictional Free Syrian Army evaporated like the morning mist, the CIA decided to stake it all on the Kurds and Operation Timber Sycamore was born. It was declared top secret and authorized directly by Obama with most of the documents bearing Hillary Clinton’s signature. In many ways it replicated unlearned lessons from a previous American fiasco known as Iran-Contras or the Oliver North Affair.

Saudi money was used to buy up obsolete Soviet-era weapons, primarily in the Balkans, and then ship them to Turkey and Jordan, all using forged paperwork to avoid appearance of illegality. From there they were supposed to filter into Syria and end up in the hands of the Kurds, who were at the time defending the town of Kobani from ISIS. Quite unsurprisingly, none of this went according to plan. The arms black market in the Middle East started overflowing with weapons, including heavy weaponry. US intelligence officers started buying up Ferraris, refusing to accept bribes in paper money—only in gold bars. Small-time arms dealers suddenly became very rich and started battling each other over market share. Just one shoot-out at a Jordanian army base claimed the lives of two Jordanian officers, two American contractors and one South African. (What illegal arms deal can ever go down without a South African being involved?) When the scale of the fiasco became obvious, the Jordanians involved in it were fired, but nothing was confiscated. Hillary Clinton was particularly livid; she was made to look really bad when some smart person posted on an official US government web site a contract for the delivery of tonnes of weapons from Bulgaria to the ports of Tasucu (Turkey) and Aqaba (Jordan) and Wikileaks got busy digging up more details.

It turns out that altogether the Obama administration squandered half a billion dollars on just the Free Syrian Army and Timber Sycamore. Instead of blaming themselves, those involved (most of them still on the job, with nary a much-deserved bullet to the head among any of them) got busy blaming Russia for not letting them “finish the job.” Here is a very nice graphic, courtesy of Wikileaks, that details the staggering amount of funds squandered by the US on its mischief in Syria.

Done with fiasco number three—onward with fiasco number four. Instead of just tossing in the general direction of Syria tonnes of obsolete Soviet-era weapons bought up in Eastern Europe using laundered money and forged paperwork, the US decided to actually play an active role “on the ground.” In October of 2015 the first 15 American instructors were helicoptered into Syrian Kurdistan. From that moment on the Americans wholeheartedly dedicated themselves to cultivating Syrian Democratic Forces (the two largest Kurdish armed groups) plus, for the sake of ethnic diversity, a couple of local Arab tribes.

In May of 2015 General Joseph L. Votel, commander of US forces in the Middle East, was flown into Syria in (relative) secrecy and met with Kurdish commanders. He attempted to force through the idea of having American advisors in Kurdistan and of having them prepare the locals for action. The Kurdish commanders and the tribal leaders were unreceptive to these ideas, and demanded that the Americans supply them with heavy weapons. Luckily, Votel had no authority to do so, and so when the Kurds started besieging the ISIS stronghold of Raqqa it was the Americans who fired the mortars and the artillery, with American Marines providing security for them. The effectiveness of these actions remains questionable.

The Kurds have shown themselves to be willful and uncooperative as allies. Their main goal is to bite off as much territory as they can and to later use it in negotiation with the government in Damascus in order to establish the largest possible Syrian Kurdish autonomy. They are generally unwilling to venture outside of their established range. They weren’t particularly willing to fight even for Manjib, which is mostly ethnically Kurdish, and their interest in capturing Raqqa has been largely nonexistent.

And yet the Americans consider it reasonable to think that once ISIS is completely routed (a matter of a couple of months at this rate) these same Kurds will help them establish and maintain control over the entire eastern shore of Euphrates all the way to the Iraqi border. Not only are the Kurds quite unmotivated to do so, but the Syrians are currently busy fortifying a beachhead and erecting a pontoon bridge in Ayash north of recently recaptured Deir ez-Zor. In the past couple of days they have moved heavy weaponry across the Euphrates to its eastern shore, knocked ISIS remnants out of the surrounding villages and are getting ready to advance toward the Iraqi border. They have made no secret of their plan to reestablish control over all of Syrian territory.

Looks like fiasco number four is already very much baked into the cake. But as usual, this is not stopping the Americans from pumping in more advisors and weapons, who will advise people who will refuse to heed their advice and arm people who will just as easily fight for them as against them. They are also pumping in other resources into constructing military bases on Syrian territory, which they will not control for any length of time. There is the airfield in Rmeilan, a larger base in Kobani and yet another airfield in Tal Beidir. Syrian Kurdistan is now playing host to a few hundred Americans armed with light weapons, Hummers and Strykers who never cease complaining about the substandard living conditions and the lack of good intelligence about what’s going on around them.

Not content to wait for fiasco number four to run its course, the Americans have launched preemptively into fiasco number five: constructing a military base in the south of Syria. Amazingly, even after all that has happened, they saw it fit to try to breathe some new life into the Free Syrian Army, and also to find some use for their bases in Jordan which had been thoroughly discredited by their performance in Timber Sycamore. To this end, they cozied up to some obscure armed groups that had crossed into Syria from Jordan and with their help established a base at Al Tanf, sufficiently heavily armed to hold that territory for a long time, and possibly to serve as forward position for an invasion from the south.

What happened instead is that the Syrians and the Iranians quickly circumvented Al Tanf and took control of the Iraqi border (with full Iraqi cooperation), rendering the Al Tanf base completely irrelevant. In recognition of this fact the Americans started dismantling and evacuating the base while the obscure armed groups they had cozied up to gave up and either surrendered to the Syrians or ran off and joined ISIS. Fiasco number five is now complete.

Fiasco number four is still ongoing, but the end result is already clear. Pretty soon there will no longer be any ISIS left in Syria for the Americans to pretend to be fighting. Their position, both in the Middle East and all around the world, is increasingly weak. Other than Syria, the country that has the most to gain from this situation is Russia. Consider the following:

• Saudi Arabia has been the major financier of the Syrian conflict, but even the Saudis have grown weary of American fecklessness and are trying to work out deals with the Russians.

• When the Israelis recognized that Syria has been conclusively “lost” to them, Netanyahu immediately jumped on a plane to… Moscow, of course, to beg for a few crumbs off the master’s table.

• Turkey has decided that cooperating with NATO is no longer on strategy and has put a down payment on Russian S-400 air defense systems which, unlike NATO-approved, US-supplied weapons, are not hindered by an inflexible friend-or-foe identification system and are perfectly happy to shoot down NATO targets.

• Even Germany—America’s most obedient lapdog since the end of World War II—has just launched an investigation into arms shipments to internationally recognized terrorist groups in Syria that went through the Rammstein military base and are illegal under German law.

As ISIS is being destroyed by the Syrians, with Russian air support, the Americans, in keeping with tradition, are blaming Russia for their loss of face, if not outright strategic defeat. If that silly blame game isn’t a sure sign of extreme weakness, I don’t know what is. The end game may not be entirely clear yet, but what is already clear is this: in order for a superpower to cease being a superpower a relatively small military defeat is sufficient, provided it is sufficiently meaningful. American performance in Syria is such that the US will no longer be party to international negotiations over Syria’s future—because its position is now so weak that it can simply be disregarded. And when it comes to meaningful military defeats, a self-inflicted one is by far the most efficacious.

Syria is not the only place where US military power is turning out to be not the least bit powerful. There is also Afghanistan, where the Taliban is busy reconquering the north of the country—the part of it that was most easily “liberated” when the Americans first invaded back in 2001. And there is also North Korea, whose leadership has successfully checkmated the US, leaving it with exactly zero viable military options—a situation the Americans are constitutionally incapable of accepting. And so they trash-talk the North Koreans, who trash-talk right back at them, making the rest of the world laugh nervously.

In conclusion, let me go out on a limb and venture a guess as to where this is all heading. I think that now that all the evidence is in that America’s superpower status is just a bit of Cold War nostalgia what comes next is… punishment. What do mommy and daddy do with a spoiled brat who has maxed out his credit cards squandering money on bar tabs, fancy toys and hookers? Why, take the credit cards away, of course!

In the case of the US, this action goes by the name of dedollarization. Those who have attempted it before—figures such as Saddam Hussein and Muammar Qaddafy—were swiftly killed and their countries destroyed. But now such countries as China and Russia are heading up the dedollarization drive—countries that the US cannot hope to oppose, especially when they act in concert—and the American response so far has amounted to empty threats, toothless sanctions and a great deal of angry but incoherent mumbling.

To describe the situation in the simplest terms possible: the function of the US military is to intimidate other countries into letting the US buy whatever it wants by printing US dollars as needed, essentially robbing the rest of the world at gunpoint. Once their ability to intimidate the world into submission is gone so will be their ability to endlessly fleece the planet. And once that ability is gone all that will remain of the “richest country in the world” is a pile of worthless paper. When precisely that moment arrives is anyone’s guess, but you shouldn’t need to time it exactly provided you can plan for it. I recommend that you do so—if you haven’t already.

22 comments
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The strange reason could be that it most likely reflected the exchange rate at the time. 100 pounds would have probably amounted to about 132 million dollars. Being British, he first thought in pounds, Nonetheless, it is still a bit strange, unless he thought he might to take the money home with him, once the war was won.

The Russia-China Plan For North Korea: Stability & Connectivityhttp://www.zerohedge.com/news/2017-09-16/russia-china-plan-north-korea-stability-connectivity

The USA, in its senseless bluster at North Korea's self-achieved ascendancy to the Nuclear-capable club, has nicely added another self-inflicted wound to its fading dignity.

Russia and China, supported by South Korea and Japan, are looking to enable North Korea's assimilation into the modern global world by building bridges (and railways and ports) to allow the North Korean's to reduce their stress levels, and to better ignore any threats from the man with the funny hair.

This effort will succeed, leaving the Western Pacific very much out of USA control. Serves it right.

I have to wonder if this "dedollarization" has emboldened our friends in Venezuela to do the same? They seem to have already gotten some support from Russia in the form of food shipments. Can you imagine poor Uncle Sam with his finger in a dike where only a few yards away the rest of the dike has been breached by something akin to hurricane Irma?

You know, reading this I felt that uncomfortable clash of emotion best summarised by the statement "I dont know whether to laugh or cry". My mind is trying to do both at the same time - a strange feeling. To read such Monty Pythonesque insanity that is so off the map of any real world one knows invokes a desire to laugh. As Cleese himself put it "humour comes from observing the edge where islands of insanity float in a sea of sanity". But then to consider the vastness of destruction, death and despair they have brought to millions from this - weeping is the only appropriate response. As a part of this mad behaviour, I wonder what comment you might have Mr. Orlov, to the Americans currently plans [if reports be true and accurate] to have started building a naval base close to Odessa in Ukraine, with plans to install a permanent Naval presence along the entire Black Sea coast of Ukraine, pointing directly at Crimea!! Can it be? Is it possible for Moscow to do anything to stop this utter violation? Again I am assaulted by mixed emotions - utter disbelief that it will ever happen, and rage at such American arrogance and insolence.

It is really a horrible fate having been born in the USA during this time period. I feel like one of the unluckiest people in the world. Although I do enjoy reading your work it always makes me feel bittersweet. On the one hand it is nice to be reading honest and accurate material yet, on the other hand, it is extremely depressing. I was once a US nationalist until I came across your work. Now, having seen the US for what it really is, I feel absolutely horrible for being born here. Reading your stuff, while always enlightening, makes me feel awful for being an American. Ignorance truly is bliss.

While I am not happy about my fate in this circus and do feel angry about the cards life dealt me I try not to wallow in misery by telling myself it could always be worse. You at least, given your hatred of the US, must be very much enjoying this whole scenario and like most Russians (and people on this planet), you must be feeling immense schadenfreude. I guess one other feature that does give me some relief in being an American is the fact that our demise is giving the world plenty of joyful entertainment. At least that makes me feel a bit better as well.

Notice the upper part of the bulbous bow protruding forward from the lower part of its bow, with most of this bulbous bow below the waterline. This hydrodynamic bulb is a marine engineering feature which has been found to reduces water resistance as the ship moves forward at speed and hence saves fuel.

So it was the Alnic MC which collided with the USS John McCain.

However, the fact remains that all the sophisticated electronic on the USS John McCain could not spot the lumbering tanker heading towards it and it also appears than nobody on the bridge or human lookouts, if any on the USS John McCain spotted the Alnic MC approaching.

One of those ancient sail powered Chinese junks of yore would have been better able to spot and avoid being rammed by the Alnic MC.

OK, good to see such a coherent summary of US misdeeds. They deserve all thats coming to them. Except it won't be the "ballooning foreign debt. The reason is in your final paragraph. The US buys whatever it wants and benefits enormously from the trade because the labor and materials are sourced outside the nation .

And what does the government give in exchange? Yes the electronic US dollar. That reserve entry at the fed is just a worthless number is an account. The US can do that manoeuvre indefinitely. It can never go bankrupt being monetary sovereign, so as long as ther are things for sale like weapons, the dollars will be at the ready,

"The Permian shale play can survive at $40 - $45 [West Texas Intermediate index, price per barrel]. The Eagleford and Bakken [TX and ND formations, respectively], not so much.

"That is why Pecos [county seat of neighboring Reeves County, TX] has become the center of oil activity in the U.S."

"I think there is enough return on investment to keep this part of the state active. Lease bonus payments and purchase offers continue to climb. I am not sure how long that will last, but I suspect for a while. Big money is looking for a place to go, and the West Texas Shale Play seems to be where they want to invest."

I do not mean to be disagreeable but I don't think of Dmitry as hating America at all. The truth surely hurts though if you like to see "America" as saintly helping those poor Syrians or whatever "downtrodden masses" they have pretended to support. This while denying access to reasonable levels of healthcare to their own masses and spending obscene amounts of American dollars on their entitled military clowns.

In maritime navigation, it is the job of the smaller, more nimble vessel to get out of the way of the larger, less maneuverable one. In the case of Alnic v. USS McCain, it should be clear which is which. Furthermore, the McCain was struck broadside and amidships, so was clearly cutting across the Alnic's "bulbous bow". One must then ask why a small and fast destroyer was doing this to a much larger ship with a much larger turning radius. In summary, the McCain was at fault.

Since so far there has been no accountability for any of this destruction of the US via military and financial misadventure, no one voted out, fired, arrested, or honorably committed suicide, I suggest we pursue the next best thing: invoking the principle of Odious Debt. Since none of these trillions of dollars were ever worth a steaming pile of elephant dung to the average America in whose name the money was borrowed, we don't legally owe it. The debt goes to all those who approved the expenditures or benefited from it or intended to benefit from it in any way.

Your assessment that the U.S. military needs oil (that it does not have), to fight a war can be measured against announcements being made on a regular basis about how some huge, new, discovery of an ocean of crude oil being found -- usually somewhere in Alaska or under some other ocean. There is big fanfare for about a week, and then these stories just kind of drift away, like all the talk about shale oil and how the U.S. is energy independent.

These stories just seem too unreal. And someone like me has to ask: "Is our domestic supply of crude oil really that far gone?

I believe that the time to worry about the U.S. going to war is when it captures some huge source of crude oil in somebody else's country.

Lately, there have been articles appearing in MSM comparing the virtues of synthetic versus real oil. Miracle oil. The question that needs to be asked is: Why the need for synthetic oil when the real thing has served us for so long, and so well? Is synthetic oil part of the substitution theory?

One last point. I am concerned that the "de-dollarization" you speak of will come sooner rather than later. This past Monday, September the 18TH, the MSM announced how the government had passed on an increase of the military budget to $700 Billion dollars, with an approval of endless war.

For greater detail on Libya and Syria operations, I like George Webb's investigation.https://m.youtube.com/watch?v=rCTzFNrsKnsHere he explains Clinton and Patraeus covert operations to steal $300 billion from Libya.